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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  January 15, 2017 2:30pm-3:01pm EST

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found ♪ ♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. ♪ david: so, what did your family think? did they say that there's something wrong with this young man. he just wants to do computers? bill: it was considered a little strange. david: have you thought how much better your life would be if you got your harvard degree? bill: i am a weird dropout, because i take college courses all the time. david: what about steve jobs in those days? what was your relationship with him? bill: we were both there at the very beginning. david: you are the wealthiest man in the world -- is that more of a burden than a pleasure, to be the wealthiest men in the world? >> would you fix your tie, please? david: people wouldn't recognize me if my tie was fixed. let's leave it this way. all right.
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♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? you built one of the great technology companies in the world and one of the great companies in the world, and now you are building and operating one of the great foundations of the world. how do you compare the challenge of building microsoft to the challenge now of running the bill and melinda gates foundation? bill: they have more common than people might expect. the idea that you find what an innovation is going to be, and really stick to it, build a team behind that. have some setbacks and successes, kind of the theory of change. my microsoft work was when i was
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very young. i started when i was 17-years-old. and that was my primary focus until i was 53-years-old when i made the transition. and for the early part of that, i was kind of maniacal. i wasn't married, no kids. i didn't believe in weekends. until i was 30-years-old, i didn't believe in vacations at all. so it was incredibly fulfilling to write the code and be hands-on, stay up all night. through my 20's and 30's, i think the microsoft thing was perfect. i didn't have the breadth of knowledge that would let me play my role at the foundation. i think it was good foundation. and then after i met melinda, got married, started having kids, i was looking at the world more broadly, thinking about where the wealth could go. and i think they are equally difficult. you always know you could be doing better.
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you know, building the team, thinking about things in a better way. so you see the positive results, but you always want to do tter. david: let's talk about microsoft. you started it in high school and you were driven to do that in computers. were you alone? bill: it was a fairly special time. computers, when i was young, they were super expensive. and my friend paul allen and i actually snuck into the university of washington when they had computers that weren't being used at night. and so we were fascinated by what the computer could do, but very few people were getting exposure. we had to go out of our way and we were lucky that we did it all. and so then when the idea of moving the computer onto a chip that intel would make, and it would make the computer literally millions of times cheaper than the ones we were using, so both more powerful and
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available to people on a personal level, then the idea of ok, it would be very different. the software you need and the way the industry would work. we were super lucky to be there when that was happening. david: so what did your family think? did they say there was something wrong with this young man. he just wants to do computers? bill: they knew i was obsessed with computers. that i would skip athletics and go in overnight and leave the house sometimes when they would prefer i wouldn't to go work at night on these things. and so i was kind of considered a little strange. in the big moment was when i said instead of gog to part of my senior year that i wanted to go work for a company writing software. they were great about allowing that to be my hobby. david: so you went to harvard and you dropped out. have you ever thought about how your life could be better off if you have gotten your harvard degree? bill: i'm a weird drop out
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because i take college courses all the time. i love learning company courses and things, so i love being a student. and there were smart people around and they fed you and they gave you nice grades that made you feel smart. so i feel it was unfortunate that i didn't get to stay there, but i don't think i missed any knowledge, because whatever i needed to learn, i was still in a learning mode. david: in the early days, you were a college dropout and very young looking. did you get taken seriously by businessmen who were older? bill: for some people that youth and geekieness this was like hey, should we trust them? that is weird. we've never seen something like that before. yes, we had to fight for acceptance. i couldn't rent cars and i had to take cabs around because i was too young. but then as we got a little bit
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of success, people were fascinated by the deep belief we had in software. david: ok, so when microsoft is moving forward, you decide to take the company public in 1986. and at that point, you are a millionaire? close to it? bill: yeah, pretty close to it. within one year of going public -- there is some fortune cover that says going public made gates $350 million or something like that. that whole period of time was amazing because i was hiring people as fast as i could. i brought in steve balmer, he was very good at that. we had a since of urgency that he wants to lead the way. there was this graphic interface thing with windows that he wanted to do. i was busy and the idea that i would hire so quickly and invest and build this company was fascinating to me, but i was
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really busy. so if some friend had tried to call me, i wouldn't have had too much time for them. i was really into building the company. and i was going out and telling people about the magic of software, which was good for microsoft, but also helping them understand about the opportunities, the huge changes that software and software plus the internet, would become. so i was having fun. it was amazing, but i always thought, hey. we are one step away from not leading here. we have to keep doing better. david: when you had the famous ibm contract, you won the contract to produce their operating system. why did they let you own it and they had to license it? was that a mistake on their part? bill: it was before graphics interface when you just had text on the screen. so the software, ms-dos, was a key thing. so it got to be more of a
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high-end machine. they didn't see how big this machine would be and their legal department didn't want to take responsibility for the first code. they had a fairly limited license. and we understood that it was a seminal machine and other people would do similar machines, so that was advantageous to us. they didn't see the value in the software. they thought that the hardware was the key and software was just the necessary thing. so they didn't realizthe positi we had, which was that software, over time, it would be way more important. they would have negotiated probably a different deal. david: you had a fair amount of money for anybody your age. did you say i will go and splurge and buy a nice car or an airplane or a boat? bill: i bought one thing that was a tiny bit of a splurge. my first car that i owned was a porsche 911. it was used, but it was an
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incredible car. that was actually when i was down in albuquerque, and sometimes when i would want to think at night, i would just drive around at high speeds, and fortunately, i didn't kill myself doing that. david: what about steve jobs in those days? what was your relationship with him in the early days and how did it change? bill: we were both there at the very beginning. the apple one was a kit computer that steve wozniak designed and they came and offered it at various computer club meetings. and we went to lots of meetings. so we were colleagues in pitching the gospel of personal computing. we were kind of competitors. the time we worked together most intensely was after the ibm pc came out, steve had a small group at apple that was doing the macintosh. and he came to us early on and
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asked us if we would commit resources, so we actually put more people on the project than apple did and did the early application software that used that mouse-graphics interface. and so it was a huge win both for microsoft and apple when the macintosh became so successful. david: when your mother first said that i would like you to come and have dinner with me and warren buffett will be here and you should meet him, you didn't seem interested? why was that? bill: warren -- i thought of someone who bought and sold security. that is not not curing disease or a cool piece of software. and the idea of looking at volu curves -- that is why it was so shocking when i met him. ♪
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♪ david: so your company grows, becomes successful. it becomes the most valuable company in the world at one at what point to you say, i have made a fair money and i don't need to do this anymore. i want to do something else with my life? bill: 1995 was the big year where we shipped the product, windows 95 and we always had the greatest staff at engineering, but we really emerge as the successful company. and so i start thinking about, wow, you know, there is a lot of value here at microsoft. what have other philanthropists done historically? during the 1990's, i am thinking about that. my mom tragically passed away the same year i got married in 1994. my dad is volunteering to think about the philanthropy piece. so it was in the year 2000 that
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i put $20 billion into the foundation, and then it became the biggest foundation at that point. david: you mentioned that you got married in 1994. how did you have time to woo somebody when you are running a company? how much time did that take? bill: well, she was an employee of microsoft. and we had run into each other in new york city, we ended up sitting together at a dinner. and, you know, she is an amazing person and kind of caught me by surprise, how much that engaged my attention, even versus all of this exciting microsoft stuff i was doing. we dated on and off for about five years and then decided to get married. david: so you have decided that your foundation would focus principally on health in africa
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and k-12 education in the united states? is that right? bill: yes. david: how did you come to those conclusions? that those were the two things you wanted to work on as opposed to everything else? bill: we talked about it a lot. that is a decision that melinda and i made. we wanted to take one of the huge difference in, and that is health. we have improved that a bit by doing agriculture and sanitation and other things. and then we wanted to take a cause that would help the u.s. be as strong as it could, and in that case trying to help improve educational opportunities. that is our big thing. david: you and melinda go into the field. why do you feel you need to go into the field in africa or latin america -- and actually meet people you are giving money to and learn? bill: i have chosen to spend my
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time, and melinda spends her time, building the foundation as an institution that really has an impact. and i get a lot of enjoyment, this is how i take everything i've learned from microsoft and the position i'm in, and helping to drive the strategy and go out and see what is going on with this work. that is my full-time job. and it is a wonderful job. david: your foundation has a certain life. it is not a perpetual foundation. i think it is 20 years after either you or your wife, the last one to live, dies? that it would end. is that how it works? bill: that's right. the way we are managing the institution, and keeping it excellent, and designing it to solve problems that can be totally solved -- we worked on malaria. this foundation should be able to participate in getting rid of that. all these infectious diseases
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that so disproportionately hurts the poor and explain the difference why a poor child has a 50% greater chance of dying than a child in a wealthy cotry. in 30 ars or 40 years, those problems should have been brought to an end. i think one of the new problems that philanthropy should go after is that people are alive then will do a much better job than we can just writing down guidance. so it is a limited time foundation. >> he lets there be a dialogue. david: when your mother first said he wanted to come to dinner and warren buffett would be there, and you should meet him, you were not interested. why was that? bill: warren -- i thought he bought and sold securities. that is a zero sum thing. that is not curing a disease or a cool piece of software. and the idea of looking at volume curves and -- it doesn't
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invent anything. so i thought that my way of looking at the world, when i wanted to figure out and what he looked at, that there wouldn't be much intersection. and that is why it was so shocking when i met him. he was the first person to ask me about software and software pricing, and why wasn't ibm with all their strength able to overwhelm microsoft, and what was going to happen and how could software change the world? and he let me ask him about why do you invest in certain industries and why are some banks more profitable than others, and he was clearly a broad thinker. so it started a conversation that has been fun and enriching and an incrediblfriendship that was completely unexpected. david: he thought you how to play bridge? or did you already know? bill: i had already knew how to play bridge.
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our family had done it. it was a chance to spend time with warren buffett so i renewed my bridge skill, it first, very poorly. both golf and bridge were things that we did in our hours to goof off together. david: you've given up on golf? bill: warren buffett gave up on golf a few years ago so my primary excuse to play golf is gone away. so i'm golfing not much now. tennis has become my primary sport. david: warren buffett called you one day and said, by the way, i'm going to give you most of my money. were you surprised when he said he wanted to give you most of his money to your foundation? bill: that was a complete surprise because warren is the best investor and he built this incredible company and he was giving me advice on all the things i was doing and i was learning so much from him. but his wealth was devoted to a foundation that his wife was in charge of.
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and so tragically, she had passed away. so then he had to think that his initial plan wouldn't make sense and much to my surprise, he decided that a part of the wealth, a little over 80% of it, would come to our foundation. so it was a huge honor, a huge responsibility, and an incredible thing because it let us raise our level of ambition beyond what we would have done without that. by most definitions, the most generous gift of all time. david: you started with the warren and melinda giving pledge. what is that about and how does it work? bill: warren buffett was brainstorming with us about how to figure out what to do. and how could they help share with each other without giving
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up the diversity of what they did. so he got us to do some dinners with people who are already doing amazing philanthropy and talk about how they built staff and picked causes. not that they would give to the same things, but the quality and even how early people get engaged would be enhanced by the people getting together and making a public commitment to give the majority of their wealth away. so that has become the giving pledge group. david: you are the wealthiest man in the world for 20 years or more, how does it affect your life daily? do people come up to and ask for money? or they expect you to buy them things? do you get tired of it? ♪
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♪ david: when you were doing microsoft at the beginning, you were doing the coding yourself? and you presumably know more about coding than just about anybody. but now you have so many responsibilities. when microsoft develops a new piece of software, are you able to talk to the software engineers in the same level that
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you could 20 years ago? bill: well, i am certainly nowhere near as hands-on as i was. when i would either write the code or look it over or hire all the programmers. in my career, this evolution of being an individual performer, then a manager, manager of managers, then setting broad strategy, you have to get used to the fact that you don't have as much control. but i try to understand enough about software that the trade-offs we are making about what features we are putting in and what the basic design should be, i still enjoy those discussions. and even today over at microsoft, we get to talk about ok, what should the next office do? how can windows be better? how will the interface change when we have handwriting and those things? so i am able to participate, but it is a way more complex deal. i couldn't actually write all the code myself. david: when somebody turns on
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their computer today, they have to have three fingers usually, and they put a finger on control, alt and delete. and it seems a little awkward to do that. why did you do that? why did people have to have that mechanism to turn on the computer? bill: most machines nowadays have moved away from that. but the idea is that we knew there was logic in the keyboard that could detect a truly unique signal that would bypass the software it was running so we can know that it was really starting over. clearly, that ended up being an awkward piece of user interface. if we had to do it over again, we wouldn't do it. it's sort of was in the chasm between microsoft and ibm that it ended up being that way. and, you know, it has kind of become the poster child of -- hey, couldn't you have made this simpler? >> we love bill. we love bill. david: so you are the wealthiest man in the world for 20 years or
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more. how does that affect your life daily? did they ask you to buy them things? bill: fortunately, people know that the wealth is dedicated to the foundation. so they have ideas that are in the foundation, infectious disease, improving education, then it is super interesting to talk to those people. i have the benefit of being well known, so i can go out and meet interesting people and share my views and get a lot of attention. i would say that's a benefit. when i'm out with the kids, it can be a tiny bit of a drawback because you don't get as much privacy as you would like, but overall, my success has allowed me to get more done, build partnerships, and work with great people. david: how do you deal with it when you go out shopping? or do you not go shopping? bill: i shop and i go the theater.
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david: do people come up to you for selfies? bill: they can, and that is pretty quick people are nice about it. david: everybody who is wealthy with children, people have to train their children how to live with the wealth, how much you give them, and how you get them involved in philanthropy? bill: the key focus is helping them enjoy learning, get a great education. all of them will pick careers that aren't related to software or philanthropy. they will strike out in their own direction and be great in their own way, whatever it is that they picked to do. so we have chosen that they will have enough wealth that they will never be poor or anything, but we are not going to keep billions of dollars and have that define their life. the vast majority of the wealth
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is dedicated to the foundation. and so far, they are great kids. you know, they enjoy learning about what we are doing in africa, and that may shape where they go with their lives, but it will be up to them. david: when people look back on what you have done 20-30 years from now, what would you like have people say bill gates achieved? bill: i don't think it is important for me to be remembered specifically. i do hope that infectious disease is largely eliminated as a problem so that nobody is having to talk about it. people can focus on other issues. that would be a huge great thing. if our work helps to improve u.s. education, that would be a huge, great thing. most importantly, the people who really know me, my kids, they feel i am a good father and gave them an opportunity to go and create their own life.
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♪ caroline: i am caroline hyde. this is "the best of bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, the president elect meets the press. donald trump faces reports from russian hacking to the media itself. plus, it is her job to make sure tech titans play by the rules. our exclusive interview with the eu competition minister.


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